IMF to hold remote consultations with Argentina amid coronavirus pandemic

The International Monetary Fund will be able to do its annual consultation with Argentina remotely if coronavirus requires it, the Fund’s top official for Latin America said, allowing work with the new government to advance amid the pandemic.

Argentina announced this week that it intends to seek a new IMF programme that will allow the existing one to be refinanced until the country can tap debt markets again. The IMF’s normal yearly check-up, called an Article IV review, would be a first step.

The review typically involves a team of IMF economists from Washington visiting a country for a couple of weeks to meet with the government and central bank to discuss policies, said Alejandro Werner, the IMF western hemisphere director. Staff at the IMF, like many places in the world, are working from home and forgoing travel. Argentina has suspended most international flights and has one of the toughest lockdowns in the region.

“We have done Article IV’s remotely in the past,” Werner said in an interview. “When conditions in a country made it impossible for a team to go or not suitable to go, we have had exceptions. When we start talking about a specific date, we’ll analyze it.”

He didn’t give a timeline for consultations to begin, saying it still needs to be worked out with the Argentine government.

The IMF gave Argentina’s previous government in 2018 a record US$56-billion bailout that didn’t help the economy stabilise. President Alberto Fernández, who took office in December, is asking the IMF and creditors for more time to pay down debts and has warned that the economy will suffer more from the virus. To date, the country has received US$44 billion of its credit-line.

Werner pointed out that the IMF is using remote processes to consider requests from more than 80 countries globally hit by coronavirus. Argentina is also talking with creditors through virtual platforms.

“That’s the way we have been forced to work, and we will make it work” Werner said.

For Ecuador, the IMF’s other top loan recipient in the region, Werner said that the nation is facing a “a new reality” as it reels from the pandemic and the plunge in oil prices. The IMF is working intensely with authorities for a new programme that will take into account the outcome of negotiations between the country and bond investors, Werner said.

On top of its existing loan, Ecuador last month asked for funds from the IMF’s rapid financing instrument to deal with the pandemic, which has killed more than 120 people, easily the most in the region after Brazil.